Eleven countries have signed a landmark Trans-Pacific Partnership trade deal on Thursday without the United States, who pulled out of the agreement last year.
The deal was signed by the remaining members of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) in Santiago, Chile. The deal will reduce tariffs in member countries, which represent more than 13 percent of the world’s economy, estimated at $10 trillion.
Before the sudden withdrawal of the United States from the pact, the collaboration would have represented 40 percent of the world’s economy.
However, even without the United States, the trade deal remains one of the largest trade agreements in the world, as it covers a market of nearly 500 million people.
The deal is a result of long process wherein the United States sought to build a regional trade architecture that excluded China, in an effort to act as a counterweight to China’s huge economic influence. However, the U.S. abruptly abandoned the trade deal when President Trump decided to withdraw from it just three days after he was inaugurated as president.
After the U.S. withdrawal, Japan and Canada took the lead in pushing for the deal to continue, with the revised trade pact being finalized in January.
The countries involved in the Trans-Pacific Partnership are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. Missing from the deal are South Korea, Indonesia, and the Philippines.
The CPTPP was built on the foundations of the Brunei-Chile-Singapore-New Zealand Trans-Pacific Strategic Economic Partnership Agreement that was signed in 2006. In the earlier version of the Trans-Pacific Partnership, the U.S. sought to enlist the strong trade markets of Australia, New Zealand, and Singapore.
Initially, Japan was reluctant to join the trade pact, but it proved to be one of the strongest advocates of the deal after it saw the pact as a way to enhance its role in regional trade.